“Commerce amongst nations should be faizr and equitable”
Benjamin Franklin
“Cultivate peace and commerce with all”
Thomas Jefferson
It was June 2005 and I was attending a seminar at an important policy think tank in Capitol Hill. While walking around the nation’s capital I came across one of the most famous landmarks in the city. I turned my head to the right and raised my eyes to read the quotes of two of the Founding Fathers. Those quotes are sculpted in the walls of U.S. Department of Commerce. Those phrases by Benjamin Franklin and Thomas Jefferson have become relevant to Central America and Dominican Republic economic and historical future.
A year has almost passed since my visit to Capitol Hill, and by now spring season is over in Central America. Winter has just begun and not just rain has started to fall, but also a rain of discussions and logrolling has taken power of the country’s polity. Since the beginning of negotiations on May 28, 2004 and with the recent ratification in almost all of the signatory countries, special interest groups are seeking to gain space in the political arena of Guatemala. The passing of the last months have already demonstrated the ignorance surrounding the discussion of the philosophical foundations of free-trade.
More so, the reason why free trade is so important will be determined by the outcomes and benefits that trade creates with the satisfaction of the human needs. Discussion in Guatemala about the CAFTA-DR will revolve around how to create the greatest outcome and satisfaction of all of the citizens. While free traders believe in the premises mentioned before, there is still a very influential group of pressure in Guatemalan society that believes that the CAFTA-DR will create a somehow different scenario. In this scenario, Central Americans will not achieve the “promises supposedly entitled by free trade” that their leaders have managed to misinterpret and exaggerate.
Therefore, a review of the ideological foundations of anti-market groups is essential for examining the CAFTA-DR debate. The ideology of anti-market groups is based on the premise that the United States represents nothing more than an imperialistic power that expects to conquer world markets with their products, destroy all of the region’s small and mid-size companies, eliminate competition through unjust business practices, and destroy the pristine mountains and rainforests in Central America. Such a strong premise is reinforced by attention-grabbing tactics aimed at audiences from a wide political spectrum. Speeches declare that many people will loose their jobs and be excluded from the economic growth that will fall only into the hands of Guatemala’s few elite.
However, in all of the reasons mentioned above those groups are somehow mistaken by the misunderstanding of trade principles and of economic processes, and their speeches have found a much sounded support in the uneducated population of Central America because information about the Free Trade Agreement have failed to be effective nor a real market economy has never been established anywhere in the world.
In fact, it will be an illusion to ignore that the United States is the most powerful economy in the world but, trade takes place only by voluntary exchange so it is a fallacy to believe that Central America will be conquered by a coactive power of the U.S. economy. It is true that many small and mid-size companies may disappear; however, those companies that will disappear will find the explanation of its disappearance in their inability to compete in world markets and satisfy consumer needs at the lowest cost possible. Trade promotes wealth, and wealth creates and important incentive for the protection of the environment by the implementation of environment friendly activities that without trade surplus may have been to expensive to undertake. Still, those are just a few of the many reasons that anti-trade groups have stated, and there are also many other reasons that prove them to be wrong or at least with a mistaken vision of market.
These special interest groups have managed to declare and convince many people that it is false that the approval of the treaty will become the solution that the Central American countries have long time waited to reach prosperity and economic bonanza. And in fact, somehow they are right because it is false to believe that just by the ratification of the CAFTA- DR the region will soon be part of double digit economic growth and that poverty will diminish in an escalade of development. The CAFTA-DR is just one step toward economic progress.
Nonetheless, economic certainty for investment and the rules of economic gain are soon to be reinforced by the CAFTA and the economic ties with the United States will represent more stable democracies also; and subsequently a tearing down of trade barriers will stimulate greater economic growth by the rising of standards of living for most of the citizens of Central America. And more so, spillovers will soon be reflected in foreign direct investment of a market competition in between the members of the treaty with the allotment of new factories, services, companies and hundreds of new business. All of which will be leaded by the premises of cost opportunity evaluation, growth viability, economic efficiency, security of investments and risk taking just to mention a few examples of a really complex market structure that is needed to undertake the road to prosperity.
Finally, while in the United States there was an active political lobbying to ratify this treaty of regulated market, in Central America the struggle for the establishment of a more regulated and world standardized market will continue. It will not only take Central Americans effort to develop all of the regions highly competitive products in world’s economy, but also an ideological fight will emerge and reinforce. While it will be on market directed followers the final victory, there are many institutional and cultural efforts to still be made.
It will be on Central America and U.S. market-directed leaders to break the chains that still keep the region from reaching a fair and equitable commerce that will have in its fully result peace and prosperity among nations. Shall those last words once written by Benjamin Franklin and Thomas Jefferson be never forgotten, while rethinking which are the real and truly ends of commerce and a free market civilization that will one day humans finally realize.
Benjamin Franklin
“Cultivate peace and commerce with all”
Thomas Jefferson
It was June 2005 and I was attending a seminar at an important policy think tank in Capitol Hill. While walking around the nation’s capital I came across one of the most famous landmarks in the city. I turned my head to the right and raised my eyes to read the quotes of two of the Founding Fathers. Those quotes are sculpted in the walls of U.S. Department of Commerce. Those phrases by Benjamin Franklin and Thomas Jefferson have become relevant to Central America and Dominican Republic economic and historical future.
A year has almost passed since my visit to Capitol Hill, and by now spring season is over in Central America. Winter has just begun and not just rain has started to fall, but also a rain of discussions and logrolling has taken power of the country’s polity. Since the beginning of negotiations on May 28, 2004 and with the recent ratification in almost all of the signatory countries, special interest groups are seeking to gain space in the political arena of Guatemala. The passing of the last months have already demonstrated the ignorance surrounding the discussion of the philosophical foundations of free-trade.
More so, the reason why free trade is so important will be determined by the outcomes and benefits that trade creates with the satisfaction of the human needs. Discussion in Guatemala about the CAFTA-DR will revolve around how to create the greatest outcome and satisfaction of all of the citizens. While free traders believe in the premises mentioned before, there is still a very influential group of pressure in Guatemalan society that believes that the CAFTA-DR will create a somehow different scenario. In this scenario, Central Americans will not achieve the “promises supposedly entitled by free trade” that their leaders have managed to misinterpret and exaggerate.
Therefore, a review of the ideological foundations of anti-market groups is essential for examining the CAFTA-DR debate. The ideology of anti-market groups is based on the premise that the United States represents nothing more than an imperialistic power that expects to conquer world markets with their products, destroy all of the region’s small and mid-size companies, eliminate competition through unjust business practices, and destroy the pristine mountains and rainforests in Central America. Such a strong premise is reinforced by attention-grabbing tactics aimed at audiences from a wide political spectrum. Speeches declare that many people will loose their jobs and be excluded from the economic growth that will fall only into the hands of Guatemala’s few elite.
However, in all of the reasons mentioned above those groups are somehow mistaken by the misunderstanding of trade principles and of economic processes, and their speeches have found a much sounded support in the uneducated population of Central America because information about the Free Trade Agreement have failed to be effective nor a real market economy has never been established anywhere in the world.
In fact, it will be an illusion to ignore that the United States is the most powerful economy in the world but, trade takes place only by voluntary exchange so it is a fallacy to believe that Central America will be conquered by a coactive power of the U.S. economy. It is true that many small and mid-size companies may disappear; however, those companies that will disappear will find the explanation of its disappearance in their inability to compete in world markets and satisfy consumer needs at the lowest cost possible. Trade promotes wealth, and wealth creates and important incentive for the protection of the environment by the implementation of environment friendly activities that without trade surplus may have been to expensive to undertake. Still, those are just a few of the many reasons that anti-trade groups have stated, and there are also many other reasons that prove them to be wrong or at least with a mistaken vision of market.
These special interest groups have managed to declare and convince many people that it is false that the approval of the treaty will become the solution that the Central American countries have long time waited to reach prosperity and economic bonanza. And in fact, somehow they are right because it is false to believe that just by the ratification of the CAFTA- DR the region will soon be part of double digit economic growth and that poverty will diminish in an escalade of development. The CAFTA-DR is just one step toward economic progress.
Nonetheless, economic certainty for investment and the rules of economic gain are soon to be reinforced by the CAFTA and the economic ties with the United States will represent more stable democracies also; and subsequently a tearing down of trade barriers will stimulate greater economic growth by the rising of standards of living for most of the citizens of Central America. And more so, spillovers will soon be reflected in foreign direct investment of a market competition in between the members of the treaty with the allotment of new factories, services, companies and hundreds of new business. All of which will be leaded by the premises of cost opportunity evaluation, growth viability, economic efficiency, security of investments and risk taking just to mention a few examples of a really complex market structure that is needed to undertake the road to prosperity.
Finally, while in the United States there was an active political lobbying to ratify this treaty of regulated market, in Central America the struggle for the establishment of a more regulated and world standardized market will continue. It will not only take Central Americans effort to develop all of the regions highly competitive products in world’s economy, but also an ideological fight will emerge and reinforce. While it will be on market directed followers the final victory, there are many institutional and cultural efforts to still be made.
It will be on Central America and U.S. market-directed leaders to break the chains that still keep the region from reaching a fair and equitable commerce that will have in its fully result peace and prosperity among nations. Shall those last words once written by Benjamin Franklin and Thomas Jefferson be never forgotten, while rethinking which are the real and truly ends of commerce and a free market civilization that will one day humans finally realize.
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